A Jewish charity in an ultra-Orthodox section of New York has been sued by a bank over an alleged $950,000 fraud scheme to obtain credit card points and rewards.
Keybank of Cleveland sued the charity, BHMD BY on Chevron, and its owner, Mordechai Gold, after an investigation revealed the massive credit card chargeback scheme.
“KeyBank seeks to prevent the fraudulent transfer or dissipation of assets, including those assets that they have already tried to put beyond the reach of KeyBank,” the lawsuit states.
Gold responded in a court filing that the allegations are a “complete fabrication.”
The bank “has attempted to dress up its contract claim as being an elaborate fraud involving over 40 conspirators,” he stated, “yet KeyBank has proffered no evidence of fraud.”
Gold, 26, Yoel Shtosel and Joel Fekete set up BHMD BY on Chevron in 2015 to establish a place of worship, Bnai Yisroel, on Chevron Road, according to the incorporation papers, and to “support the spiritual needs of the community with providing free loans and to support the religious, intellectual, moral and social welfare among them.”
According to the lawsuit, BHMD opened an account with KeyBank in March for credit card transactions. They employed a vendor, Fiserv, to process credit and debit transactions and collect funds. It was this vendor that reportedly noticed the alleged fraud.
Fiserv became suspicious and opened an investigation. BHMD was repeatedly charging the same, even-amount for transactions on high-reward credit cards. When the vendor questioned Gold, he said BHMD had been taking advance orders for Hebrew texts. Fiserv pressed for details, the complaint states, but Gold could not provide them.
Fiserv concluded that Gold and BHMD had colluded with customers to process fraudulent credit card transactions, collect the credit card rewards and steal the funds.
“BHMD and Gold then transferred the fruits of the fraud into outside bank accounts and took cash withdrawals,” according to the complaint.
The alleged scheme was completed when the account was closed and customers began demanding refunds, with some claiming they didn’t recognize the charges and others saying the amount was wrong. KeyBank expects to lose more than $950,000 from the chargebacks.
Gold and BHMD deny all this, but there should be a very clear paper trail that shines a clear light on what occurred. It’s just another reminder that just because someone’s a religious leader, it doesn’t mean he deserves unearned trust.
(Image via Shutterstock)